When an insurance coverage dispute occurs, policyholders might be unsure whether they need a lawyer.
Did you know that in 2024, there was a significant increase in disputes between providers and payers in the US insurance industry, especially in health insurance? According to a Time article published in May 2025, Americans spend at least 12 million hours a week calling their health insurance company. This demonstrates how complicated the American health-care system is and how common it is for policyholders to have their claims denied, which is a leading cause of insurance disputes.
Insurance disputes can result from different situations, such as denied claims, underpayment, or a lack of clarity regarding policy terms.
According to a Los Angeles insurance bad faith attorney, insurance companies are legally required to offer coverage, follow the policy terms you pay for, act in your best interest, and pay valid claims as stated in the terms of your contract.
Understanding whether you should hire a lawyer to help deal with these complications is important. This article will discuss the factors that need to be taken into account before hiring a lawyer for assistance in insurance coverage disputes.
Understanding Insurance Coverage Disputes
When insurance coverage disputes occur, gather the necessary information about the case. Identify the main concern of the dispute. Was a claim denied or paid less than it should have been? Or are there problems with the policy terms?
Read closely through your insurance policy since every word can be useful for your case. Keep a record of all communications between you and the insurer for future reference.
Determine whether your dispute, such as having your life insurance claim denied, is subject to specific state laws that may affect the outcome.
When to Consider Hiring a Lawyer
When should one seek a lawyer's assistance in an insurance claim dispute?
Evaluate the difficulty of your case. If your claim involves a significant amount of money or unusual legal terms, you should obtain the opinion of an insurance claims lawyer.
If your claim is denied or you believe the settlement is unfair, an attorney can help you negotiate the issues.
When you simply feel overwhelmed with the issue, an attorney can help ease your concerns regarding your rights.
If your dispute does get into litigation, you will want to have a lawyer looking after your interests.
Follow your instincts. If you believe there is something wrong with the way your insurance claim is being handled, do not hesitate to seek legal counsel.
The Costs of Legal Representation
Understanding legal costs is important when deciding whether to retain a lawyer for an insurance coverage dispute.
The attorney fees may differ on several accounts, such as the attorney’s experience, the procedure of the matter before the court, and the geographical location of your house. Your lawyer might charge by the hour, a fixed fee, or a percentage of any settlement you receive.
Hourly charges can quickly add up, especially if the cases drag on for a long time. Meanwhile, flat fees are less vague but may not cover potential legal challenges.
A lawyer who is paid on a contingency basis receives a set percentage of the money awarded in the case, but only if the case is won.
After weighing the costs of hiring an attorney, you must decide whether hiring one would benefit you.
Evaluating Your Case
Before hiring a lawyer to deal with an insurance coverage dispute, look at the circumstances of your case.
Check your insurance policy to see what coverage limits, exclusions, and obligations the policyholder has.
Gather copies of correspondence with your insurer and evidence supporting your position. Based on these facts, assess your case's strength and the chances of successfully pursuing the matter yourself.
Compare the possible costs with the benefits of lawyer involvement. This information might help you decide if you can handle the matter alone or if legal help is necessary.
Steps to Take Before Seeking Legal Help
Before seeking legal assistance, you must first evaluate your case and follow certain procedures.
Gather all documents related to your insurance policy and the dispute, including the policy itself, any communication with the insurer, and evidence of your claim.
Review your insurance policy carefully to understand its terms and conditions.
Try to resolve the issue with the claims adjuster first. Keep a written record of the conversation, including dates and details.
If you haven't done so, get advice from a consumer protection agency.
